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323228 Best Insurance KPIs and Metrics Examples for 2020 Reportinghttps://insightsoftware.com/blog/best-insurance-kpis-and-metrics/
Fri, 05 Jun 2020 07:12:57 +0000https://insightsoftware.com/?p=116533What Is an Insurance KPI? An insurance Key Performance Indicator (KPI) or metric is a measure that an insurance company uses to monitor its performance and efficiency. Insurance metrics can help a company identify areas of operational success, and areas that require more attention to make them successful. These KPIs are often used to compare … Continued

An insurance Key Performance Indicator (KPI) or metric is a measure that an insurance company uses to monitor its performance and efficiency. Insurance metrics can help a company identify areas of operational success, and areas that require more attention to make them successful. These KPIs are often used to compare companies in the insurance industry against each other to see which would be a better investment.

KPIs and Reporting in the Insurance Industry

The insurance industry is large and complicated. Insurance KPIs and reporting can be just as complicated. Most of the time, thinking about KPIs and reporting will give you a headache. At insightsoftware, we like life to be simple. As such, this blog post will break the insurance industry and its KPIs down into small bite sized pieces that you can easily digest. We will go over insurance KPI examples for the sales, claims, and finance departments, as well as how you can streamline your reporting process using insurance reporting solutions.

How to Build Useful KPI Dashboards

Sales KPIs for the Insurance Industry

Sales are the backbone of the insurance industry. You can have all the products you want, but without someone selling them, you can’t make a profit. This section will go over the insurance KPI metrics that your company should be applying to its front-line staff:

Quote Rate – The quote rate is the most fundamental insurance key performance indicator that can be used to gauge staff performance. The quote rate measures how many quotes a staff member has been able to provide compared to the number of leads they have contacted.

Quota Rate – The name of this insurance KPI only differs by one letter from the previous, but measures something even more important than the quote rate. The quota rate is used to measure the performance of staff in meeting their sales targets. It is important that a company doesn’t set the quota so high that it is unattainable, or staff may feel demoralized and unmotivated. This rate can help set an appropriate quota.

Contract Rate – The contract rate insurance metric is straight forward. This KPI measures how many leads a staff member was able to contact vs. the total number of leads they reached out to.

Number of Referrals – This insurance KPI measures how many new clients were referred by existing clients against the total number of new clients over a given time period. This insurance metric helps gauge two different aspects. The first is how satisfied your existing clients are with your products and services. The second is how much of the company’s growth is organic as opposed to being advertisement driven.

Bind Rate – The bind rate insurance KPI is useful as it measures individual performance of staff, showing who has the skills to close a deal. The bind rate is the percentage of quotes that are converted into legally binding policies.

Percentage Pending – This is a typical insurance KPI used to evaluate how efficiently the team is working together. This measures how many policies at any given time are pending approval as a percentage of the total number of policies established. A high percentage pending can indicate a bottleneck in your company’s workflow.

Sales Growth Rate – This insurance performance metric measures how much a company’s sales have increased (or decreased) over a specific period. This metric is best utilized when broken into two different categories. It should be used to measure the number of new policies as well as the number of policy renewals, as these two figures can give you more insight into how the business is performing.

New Policies per Agent – You want to know who your top performing agent is, don’t you? This insurance metric helps companies keep track of who their star performers are, as well as bringing about some healthy competition between agents.

Retention Rate – Obtaining new clients can be a costly and time-consuming process. In fact, it is much more profitable for companies if they can renew an exiting policy. This key insurance metric tracks the percentage of policies that are renewed against the number of new policies issued.

Policies In-Force per Agent – This insurance metric isn’t targeted at the agent specific level. It takes the total number of policies in-force and divides it by the total number of agents on staff. This insurance KPI can be used in conjunction with the retention rate metric and the sales growth rate to try and identify where inefficiencies are occurring.

The front-line staff are an integral component to any insurance company. However, they only represent one component of an insurer. These examples of sales KPIs in the insurance industry should give you a place to get started when analyzing your company’s performance. On the other hand, if your company already has quite a few insurance performance indicators in place, maybe it is time to create some new ones tailored to your specific operating structure. We can help you with that, too.

How to Develop a Key Performance Indicator for an Insurance Company

As we stated previously, the insurance industry is large and complicated. As such, you might find yourself looking for different performance metrics to evaluate your company’s performance. To completely tailor a KPI to your needs, you can create your own. This section will go over what should be taken into consideration when developing a new key performance indicator for an insurance company.

Have a goal. This is fundamental. You can’t create a KPI without having a clear goal in mind. This goal cannot be subjective. It needs to be numerically assessable.

Take a holistic approach. When thinking about your KPI, think about the impact the insurance KPI will have on the company. Will it impact other business units? Or does it help the whole company move together as a homogenous unit?

Align with company processes. Don’t create a KPI that would be resource intensive. Try to integrate the performance metric with the existing company framework. Not only will this reduce the resource burden, it will help to quickly identify inefficient processes.

Create a company culture. This might sound like a lot to think about when creating a KPI, but it can be helpful. Consider the mentality of your staff at the company. Create an environment in which the KPI positively impacts the workplace and encourages/rewards people for doing things that will benefit the company.

Compiling the data and reporting it. This is one of the most critical aspects of creating a KPI in our opinion. A lot of thought and effort has been put into creating a new insurance KPI and implementing it, but this KPI is only useful if you can track and interpret the data. A KPI dashboard can streamline this process making it very simple and efficient.

Make informed decisions. This is the whole purpose of implementing insurance key performance indicators. The KPI that you have created should be able to provide the company with insight into their operations, and help the company make informed decisions.

This should give you an idea of what makes a good insurance key performance indicator. Coupled with the top insurance KPIs that we talked about for your sales force, you should be ready to streamline your company. We can’t emphasize enough the importance of using insurance dashboard software to keep track of your KPI performance.

How to Compare Reporting & BI Solutions

Key Performance Indicators to Use for Insurance Claims

The next large insurance business segment we will explore is claims. Ideally, an insurance company would like to see zero claims, as it would mean that all their policies are returning the maximum profit. However, the world is not an ideal place. Claims are a real part of the business, and insurers are often forced to pay on their policies. Check out these examples of KPIs in insurance that should be out-of-the-box for any insurance dashboard:

Average Cost Per Claim – In the insurance industry, you are going to have to pay out on claims. That is just the nature of the business. The question is, how much are you going to be paying out? This insurance performance indicator helps estimate this by figuring out the average cost of each claim made. Using insurance reporting software, this data can help an insurer set its rates as well as give an indication of future financial performance.

Claim Frequency – This key insurance metric measures the likelihood of a loss. It does this by predicting how many claims are to be expected based on the number of policies outstanding. This can help a company manage cashflows, risk exposure, and rate setting.

Components of Claim Costs (CCC) – This is a key performance metric that the insurance industry relies on heavily. The CCC metric seeks to provide insight into what costs are associated with a claim. The costs are generally associated with the following items: legal fees, time to settle, administration costs, and report delays. This insurance metric can be used to identify inefficient business segments and reduce costs.

Average Time to Settle a Claim – This might not be an insurance performance metric that you would think of right away. However, it is crucial to any insurance company. The claim settlement time should be used to monitor different policy types as more complicated policies will obviously take longer. However, it is important that companies try to keep the settlement time as low as possible, as it will increase client satisfaction and retention.

Client Satisfaction – This insurance KPI is a little tricky to implement and measure accurately. Most companies do it somehow through surveys, but this is a somewhat objective measure. Client satisfaction is probably best represented in client retention and policy renewal.

Problem Resolution Rate – The longer a problem drags on, the more money it will cost your company in resources that could be used for making money. It is important to try to resolve client problems as quickly and efficiently as possible.

Calls Handled within 24 Hours – This insurance metric is used to determine how efficient and effective a company’s claims resolution team is. This KPI shouldn’t be used entirely by itself. A company should also consider how many calls the team receives.

Underwriting Cycle Time – This insurance performance indicator measures the number of days it takes the underwriting department of a company to process an insurance policy application. This top insurance KPI can highlight inefficient underwriters, which can have a negative impact on client satisfaction. In the worst-case scenario, the client binds a policy with a different insurer while you are still waiting for you underwriter to finish. This will have wasted the time and efforts of your agents, costing the company money.

Claims Ratio – The claims ratio is a very powerful insurance metric. It takes the number of claims made and divides them by the amount of insurance premium earned for a specific period. This can give insight into how the business is performing by looking for anomalies. A higher than normal ratio would indicate the potential of fraud, while a lower ratio could indicate people having issues making claims. This metric is best utilized when combined with other metrics to determine the root of the anomalies.

The insurance KPI metrics that we covered in the claims section tend to be fairly data heavy and require a bit of data manipulation in order to gain true insight. This leads us directly into our next section about insurance dashboard software and insurance reporting solutions.

How an Insurance Dashboard Can Streamline Your Reporting

We have gone through a lot of insurance KPI examples. Imagine trying to gather, manage and report all that data. It would be quite a process. In fact, it wouldn’t even seem unreasonable if a company needed an entire team to manage this task. But that is a costly endeavor that could potentially outweigh the cost savings derived from the data. That is why we suggest using something like our insurance BI software. Let’s look at some of the major benefits of using an insightsoftware solution:

Automated data collection. Our software is able to interface with your existing ERP and automatically extract the data you need for your KPIs and reports.

Centralized data. Over are the days of transferring files with a USB. All your data is stored in a central location such that you and your team can always access it. This means less time is wasted waiting on people to send you data.

Prebuilt KPI templates with ERP interface. At insightsoftware, we are proud to provide out-of-the-box business intelligence software solutions. Our prebuilt KPI templates and dashboards can interface with your favorite ERP software to make a seamless process.

Reports at your fingertips. When you combine automated data collection, centralized data, and prebuilt KPI templates with ERP interface, what do you get? Instant updates. Your boss wants a report two minutes before a meeting? No problem, your report is one click away.

Using an insurance dashboard solution can help streamline you reporting process and identify inefficiencies in your company. In turn, this will improve your company’s financial position. Here are some insurance KPI examples that you can use to monitor your company’s finances.

Financial KPIs for the Insurance Industry

Financial KPIs are at the heart of all reporting. Everyone wants to know how a company is doing financially. However, that doesn’t mean that every industry has the same financial metrics. We have collected some insurance KPI examples that the finance department should be tracking:

Expense Ratio – How much does it cost you to earn each dollar? How much are your expenses? The expense ratio performance metric compares the company’s total expenses to the premiums it generates over a specific time period. This can help identify if premiums are too low or the company can be more efficient.

Average Policy Size – This insurance metric measures the total amount of premium collected and divides it by the number of policies issued for a given time period. This can be used to assess a company’s risk profile. Lots of small policies are less risky than one large policy.

Loss Ratio – No one likes losing, but it happens to the best of us. This insurance KPI divides the total claims payout and divides it by the total premium revenue. A high loss ratio may indicate that policy premiums are set too low.

Average Revenue Per Client – We can use this insurance metric to determine the maximum amount of money a company is willing to spend to obtain a new client. If a client is overly difficult to obtain, it might not be worth the potential revenue for the company.

Cost Per Quote – Most agents probably don’t even think about this insurance KPI. It is something that the management team should be keeping track of. The cost per quote takes into consideration all the costs that the company incurs in order to get a quote in front of a potential client.

Cost Per Bind – This is an insurance metric that often gets overlooked even though it is very important. The cost per bind metric determines the incremental cost of binding a new policy. It essentially represents the price a company pays to obtain a new client.

Cost Per Bind by Vertical – This insurance KPI builds on the cost per bind metric by breaking things down to a finer resolution. The metric breaks up your cost per bind by their verticals. For example, what is your cost per bind on auto policies vs. travel policies? This can help determine which verticals are more profitable and which are dragging the profits down.

Net Profit Margin – This is the official measure of “are you profitable.” If your net income isn’t positive, you aren’t making a profit. But, when you do have a net income that is positive, just divide it by the total revenue. This will give you your net profit margin. Above 10 percent is considered very healthy.

Administrative Costs Per Policy – This is a more detailed version of the expense ratio KPI that we talked about before. This one scrutinizes a specific cost that can really make or break policy profitability. This insurance KPI takes the cost of the policy administration department and divides it by the number of policies outstanding.

We know that this can be a challenging topic to read about, but it is the first step to making change at your company. These changes can help increase staff productivity, reduce client turnover, and drive down the potential for human error.

Still curious about something? Drop us a line. One of our reporting experts at insightsoftware will answer any questions you have regarding insurance reporting software or insurance KPIs.

5 Things Not to do When Choosing a Financial Reporting Tool

]]>Infographic: How Can Nonprofits Take Charge of Operational Efficiency?https://insightsoftware.com/blog/infographic-how-can-nonprofits-take-charge-of-operational-efficiency/
Thu, 04 Jun 2020 07:42:32 +0000https://insightsoftware.com/?p=116335Nonprofits have additional financial challenges due to receiving funds from grants and donations that are often restricted for certain uses. Budgeting and planning can also be tricky because of different income streams and compliance issues. With budgeting being tight, it’s important to prioritize operational efficiency in order to grow revenue. Check out this infographic for … Continued

]]>Nonprofits have additional financial challenges due to receiving funds from grants and donations that are often restricted for certain uses. Budgeting and planning can also be tricky because of different income streams and compliance issues. With budgeting being tight, it’s important to prioritize operational efficiency in order to grow revenue. Check out this infographic for helpful how-to tips.

]]>How Nonprofit Finance Teams Can Spend Less Time Gathering and More Time Analyzing Datahttps://insightsoftware.com/blog/nonprofit-finance-teams-spend-less-time/
https://insightsoftware.com/blog/nonprofit-finance-teams-spend-less-time/#respondThu, 04 Jun 2020 07:12:00 +0000https://insightsoftware.com/?p=105416Nonprofit finance professionals play a critical role in tracking costs, donations, and operational expenses in order to assess financial health and keep the organization on track. Recent decreases in government reimbursements and donations mean nonprofit finance teams need to monitor the health of their organizations even more carefully. Tools that simplify tracking and reporting can … Continued

]]>Nonprofit finance professionals play a critical role in tracking costs, donations, and operational expenses in order to assess financial health and keep the organization on track. Recent decreases in government reimbursements and donations mean nonprofit finance teams need to monitor the health of their organizations even more carefully. Tools that simplify tracking and reporting can help plan for new sources of revenue and strictly evaluate spending to prioritize the needs of those served.

Today’s Nonprofit Challenges

Do you find yourself struggling to track and analyze metrics across funding sources each of which has unique reporting requirements? If so, you are not alone. Most nonprofit finance teams resort to manual Excel processes and spreadsheets to make sense of their data, but this is not without its challenges:

Federal and state grants have very specific reporting guidelines involving not only the nonprofit organization, but also the sub-recipients of the grant. Each reporting stage needs to be tracked by finance and disclosed to the public. Data accuracy is key and often suffers due to lack of suitable reporting tools.

As charitable donations and reimbursements decline for nonprofit hospitals, the need for accurate, timely financial tracking plays an even more important role in covering costs while maintaining quality of care.To maximize what little revenue is available, finance needs reporting software that offers real-time access to income and expenditure data.

Nonprofit colleges use a statement of financial position to detail liabilities and net assets, which can include donations tracked as either unrestricted or restricted monies.Finance often uses time consuming and potentially error-prone manual data pulls and spreadsheet formatting to produce these reports. A solution that pulls directly from multiple ERPs into existing reporting templates can streamline report creation.

How To Simplify Tracking and Reporting

How can you deliver on all these requirements when technology budgets are limited? The key is to evaluate finance-focused reporting software that can save you money by improving the accountability and efficiency of your finance team. With the right reporting and analysis solution, you can better identify and realize cost savings . Because budgets are tight and operational expenses are closely monitored, look for these specific benefits as part of your ROI assessment.

Minimize wasted time by reducing manual reporting processes, such as tracking grant stages and by automating Excel reporting with real-time access to ERP data from multiple sources

Speed investigation of reconciliation and integrity issues by choosing software that gives you the ability to drill into live data directly from Excel to identify and track assets such as unrestricted and restricted donation monies

Simplify and accelerate planning processes by automating the distribution of budget forms to stakeholders for easy completion, consolidation, and approval to help streamline the collection of grant information from sub-recipients. Again, this frees up time for finance to focus on more value-added activities

With the right solution, you can maintain control and quickly address the reporting necessary on contributions, donors and expenses. Quick access to critical grant and funding data helps support financial analysis on which programs are successful or not. Nonprofit finance teams need to measure their performance on key KPIs such as:

Donor growth year-over-year

Donation growth

Average gift size growth

Donor retention rate

Pledge fulfillment percentage

Recurring gift percentage

Fundraising ROI

insightsoftware solutions help you easily manage reporting for your various funding sources, stay ahead of tax and regulatory filings for your nonprofit standing, and free up time for analysis and identification of new funding sources. Improve plans for future sustainability and analyze trends with accurate, real-time data at your fingertips. To learn more about how efficiencies in tracking and reporting can benefit your nonprofit, request a free demo.

]]>https://insightsoftware.com/blog/nonprofit-finance-teams-spend-less-time/feed/0What Purchases Should You Approve in a Coronacrisis?https://insightsoftware.com/blog/what-purchases-should-you-approve-in-a-coronacrisis/
Tue, 02 Jun 2020 07:15:00 +0000https://insightsoftware.com/?p=115517The coronavirus crisis has caused an immediate and dramatic shift in the way we do business. Customer demand has abruptly shifted, and for some businesses, revenue has all but disappeared. Even for so-called essential businesses, the sharp drop in economic activity resulting from the shutdown is sure to have an effect sooner or later. In … Continued

]]>The coronavirus crisis has caused an immediate and dramatic shift in the way we do business. Customer demand has abruptly shifted, and for some businesses, revenue has all but disappeared. Even for so-called essential businesses, the sharp drop in economic activity resulting from the shutdown is sure to have an effect sooner or later.

In virtually every business in every industry, the most immediate concern has been liquidity. Government stimulus loans have provided a lifeline for many small and mid-sized businesses but, for most, the situation calls for keeping a close eye on cash for the foreseeable future.

While revenue and collections are clearly priorities, there is a great deal that businesses can do on the buy-side to contribute to an effective cash preservation strategy. Here are some important things to consider when it comes to purchase decisions this year:

Optimize Your Inventory

Inventory is cash sitting on a shelf in a warehouse. Unlike cash, however, it costs your business money, even when it is doing nothing. Insurance costs, excise taxes, warehouse costs, and inventory shrinkage all affect the bottom line. Even worse, inventory can lose some of its value when newer, more desirable products reach the market or as the demand curve shifts downward. Most importantly, though, inventory is simply less liquid than cash in the bank.

Companies that trim inventory too aggressively may miss out on sales opportunities, however. If you run out of a product, customers may seek it elsewhere. In the process, they may shift more of their purchases to your competition.

For years, tech-savvy companies have understood the value of investing in inventory optimization tools. By carefully balancing expected customer demand with the goal of minimizing inventory, optimization tools can help your company run lean. There are some very sophisticated products on the market that do this but, to achieve the greatest bang for your buck, inventory optimization can be as simple and straightforward as developing a robust set of reports and forecasts built on data from your current inventory management software.

Mind Your Supply Chain

In light of the current crisis, however, the mandate to manage inventory carefully comes with an important footnote: Expect some disruption in the supply chain and plan accordingly. In early 2020, we heard stories about automotive companies scrambling to get spare parts out of China as travel restrictions were beginning to take effect. COVID-19 outbreaks have shut down production facilities in some industries, making it more difficult to procure products and raw materials.

Any upstream disruptions in the supply chain will have a domino effect. If your business depends on goods or raw materials for which there is no substitute, then it may be worthwhile to increase inventories of those critical items while you can.

CapEx and Leases

Most capital expenditures are driven by a need to increase productive output. To the extent that forecasts have changed for most businesses, it makes sense to re-assess planned CapEx investments. CFOs should begin from a baseline assumption that every future capital expenditure needs to be justified, even if it was already approved. Most large corporations have aggressively slashed CapEx outlays in anticipation of lower demand.

Not everyone is cutting back, though. Verizon has seen dramatic increases in traffic on its network, for example, as remote work and distance learning have become the norm for many people. The company recently announced plans to invest $500 million to upgrade its network capacity.

Investments that made sense a few months ago might no longer be justifiable. That does not mean that companies should halt capital expenditures altogether, however. Where there are opportunities to shift to a new business model or to increase efficiencies in the organization, some capital expenditures may be more worthwhile now than ever.

Revisit Your Budget

For most businesses, it makes sense to examine discretionary spending closely, at least until there is greater confidence that the business climate will return to normal. Trimming expenses early in a crisis is a good practice. In a study of business resiliency, McKinsey & Company found that the most resilient companies were the ones that aggressively trimmed their balance sheet and expenses early. These companies were well-positioned to invest in new growth opportunities at the start of the recovery cycle.

CFOs should be revisiting budgets to assess what is truly essential versus what is discretionary. Each line item should be examined with the same question in mind: “In light of our current situation, is this expense essential? Does it still make sense?” In the most obvious cases, that decision will have already been made, but when it comes to the details, a closer review should reveal additional areas to cut.

Review Active Projects

Projects that were previously approved may be reconsidered in light of the coronacrisis. Presumably, each of these was given a green light at some point in the past, based on a sound business case. Does that business case still hold up to scrutiny?

Just as importantly, are there any new projects that should be funded instead? Are there initiatives that could help the company run leaner, better support remote workers, or provide a product or service that can better survive the operational restrictions required as a result of the coronavirus? Technology has been a clear enabler throughout this crisis, for example. Are there specific areas where technology could support the business in its efforts to run lean?

Keep PPP Guidelines in Mind

For US businesses that took Paycheck Protection Program (PPP) loans, there are some important restrictions that could impact loan forgiveness. PPP loans will be forgiven if all of a company’s employees are kept on the payroll for eight weeks, and the money is used for payroll, rent, mortgage interest, or utilities.

Similar provisions may apply to government assistance programs through other US government entities, state programs, or stimulus programs outside of the United States. In any case, be sure that you understand the detailed requirements and follow them to the letter.

Above all, CFOs should avoid a one-size-fits-all approach to running lean. For most businesses, it will indeed make sense to cut back purchases in some areas. In many cases, it will make just as much sense for those same businesses to increase outlays that can bolster their resiliency and increase their capacity to weather this storm . . . and the next one that comes along.

]]>Cash Flow Analysis: Cash Management Has Never Been so Criticalhttps://insightsoftware.com/blog/cash-flow-analysis-cash-management-has-never-been-so-vital/
Mon, 01 Jun 2020 14:10:42 +0000https://insightsoftware.com/?p=116683Are you being asked to provide answers to many new scenarios like: Where your Cash flow will be in a certain number of days. Which payments you can you delay on? Which vendors are overdue? To learn how best-in-class businesses are solving this problem join this 20-minute session to see: Ease of building Cash flow … Continued

]]>Infographic: Support Education for the Future with the Right Financial Reporting Todayhttps://insightsoftware.com/blog/infographic-support-education-for-the-future-with-the-right-financial-reporting-today/
Fri, 29 May 2020 07:41:46 +0000https://insightsoftware.com/?p=116114As education has rapidly adapted to an online presence, financial reporting must shift to accurately reflect associated changes in accounting and budgeting. Existing financial models cannot match the pace of education today, with many current business models not sustainable for the next five to 10 years. How do you get control of your data to … Continued

]]>As education has rapidly adapted to an online presence, financial reporting must shift to accurately reflect associated changes in accounting and budgeting. Existing financial models cannot match the pace of education today, with many current business models not sustainable for the next five to 10 years. How do you get control of your data to provide the visibility your institution’s leadership needs to make the best decisions for the future? It’s all about putting financial reporting back in the hands where it belongs: Finance. Dig deeper on how this can benefit your institution with this infographic.

]]>5 CFO Strategies to Build Business Resiliencehttps://insightsoftware.com/blog/5-cfo-strategies-to-build-resilience/
Thu, 28 May 2020 07:34:48 +0000https://insightsoftware.com/?p=115552For most business leaders, the current crisis has been a wake-up call. Unexpected events have brought about enormous changes in customer demand, the supply chain, and the availability of the workforce. Throughout all of this, “resiliency” has emerged as a major theme. Although not all industries have been equally affected by the crisis, there are … Continued

]]>For most business leaders, the current crisis has been a wake-up call. Unexpected events have brought about enormous changes in customer demand, the supply chain, and the availability of the workforce. Throughout all of this, “resiliency” has emerged as a major theme.

Although not all industries have been equally affected by the crisis, there are a number of common themes, and the overall lesson is clear: Agility, adaptability, and resiliency can make the difference in the survival of your business.

Here are five strategies to consider as you look to the future.

1. Expect the Unexpected

Resilient organizations are adept at scanning the environment, seeing what may be on the horizon, and understanding the implications earlier than their counterparts. Deloitte calls this “anticipation capabilities and collateral pathways.” This kind of foresight arises from having both a macro and micro understanding of the world. It requires the ability to see the big picture, such as global economic trends, as well as a lower level picture of the company, the industry in which it operates, and its immediate environment.

For years, large enterprises have used scenario planning to anticipate circumstances that might not previously have been imagined or discussed in much detail. The practice has its origins in the US military, but began to be more widely adopted among large businesses in the 1960s and 70s. Today, it is a well-established practice that can benefit organizations of almost any size.

At its heart, scenario planning challenges participants to imagine possibilities that fall outside of their normal day-to-day experience. It helps managers to overcome normalcy bias and quickly establish whether things are, in fact, different now.

CFOs should develop their organization’s forecasting and analysis capabilities to support this practice, whether it takes place as a formal exercise at an annual offsite or informally at strategic reviews. By combining scenario planning practices with strong reporting and analysis capabilities, organizations can increase their ability to anticipate disruptive events and develop detailed plans to deal with them.

Resilient companies do not just react quickly ahead of a crisis, however. According to McKinsey’s Cindy Levy, they are also ahead of the curve when it comes to recovery. Top performers tend to focus on opportunity and growth coming out of a crisis. Companies that move quickly to trim back their operations going into a crisis are better positioned to take advantage of opportunities on the rebound.

3. Invest in Future-Proofing

Companies that have a strong technology foundation also tend to weather crises better than their peers. Technology enables resiliency in multiple ways. Cloud computing platforms, for example, typically provide automated backup and failover capabilities that previously might have been managed in-house, at a substantially higher cost. As employees have shifted to remote work, collaboration tools have made it possible to continue getting the important things done, despite significant barriers. Organizations that have such tools in place before a crisis have a significant advantage.

There is a larger implication, however, to the observation that tech-friendly companies fare better during a crisis. A recent study by the Centre for European Economic Research (ZEW) indicates a strong correlation between innovation and resiliency. Organizations that view technology as a competitive advantage, an enabler of innovation, are not only more adaptable, but they are also more likely to think creatively and come up with solutions to get them through the crisis.

Strategic investment in technology today will yield results regardless of what is going on in the outside world, but when disruption occurs, it plays a more important role than ever.

4. Build Failover Capability

There is an old saying in the military: “Two is one, and one is none.” When the stakes are high, it is important to have a backup plan. Failover systems need not be costly, however. It can be as simple as cross-training staff to mitigate unexpected emergency absences. As many businesses have discovered recently, though, it is useful to have fallback systems already in place when a crisis hits.

For the CFO, it is more important than ever to have strong relationships with lenders and investors. As many businesses discovered recently, a healthy relationship with your primary lender can be a deciding factor in getting a much-needed cash infusion, even when that funding is coming from a government source.

Strong relationships with vendors and customers are likewise critical. At a time when cash is tight for most businesses, your ability to leverage good relationships may enable you to extend payment terms with your vendors or, if necessary, to retain your most valued customers by extending more generous terms.

Ultimately, resiliency is a discipline that must be practiced on an ongoing basis. It starts with a habit of scanning the environment and asking “What if . . . ?” It requires a capacity to think differently when everyone else may be subject to normalcy bias.

Finally, it calls for the foresight to make strategic investments in technology that afford the organization greater flexibility in good times or bad. CFOs play a critical role in driving these practices that support and enable long-term resiliency.

]]>Exploring Oracle’s Push to the Cloudhttps://insightsoftware.com/blog/oracles-push-to-the-cloud/
Fri, 22 May 2020 07:18:12 +0000https://insightsoftware.com/?p=113116For the past few years, enterprise software companies have been steadily increasing efforts to move their customers to the cloud. While they spend a great deal of time touting the benefits of the cloud for their customers, they clearly see advantages for themselves as well: increasing revenue with more stable and predictable revenue streams, higher … Continued

]]>For the past few years, enterprise software companies have been steadily increasing efforts to move their customers to the cloud. While they spend a great deal of time touting the benefits of the cloud for their customers, they clearly see advantages for themselves as well: increasing revenue with more stable and predictable revenue streams, higher visibility to how customers are using their product, the ability to more easily push fixes down to customer environments, and more.

Oracle is certainly no exception to this trend. Although Oracle arrived a bit later to the game than some of its competitors, the company has gradually been turning up the volume on its push to the cloud. Oracle has re-aligned its sales organization and incentives to prioritize cloud sales, and it has communicated consistently and effectively about its cloud strategy. The overall message is clear: Oracle’s long-term vision is to migrate its customers to the cloud.

Oracle, SAP, and others have indicated that support for their on-premises solutions will eventually end. Even in the face of such statements, though, most customers appear to be proceeding with caution and are closely watching as vendors signal their long-term plans for on-premises support.

On-Prem Still Prevails

The vast majority of customers are still using on-premises software for most of their business processes. While many companies are evaluating the merits of the cloud, relatively few of them have actually taken the plunge. Most people are resistant to change, and business technology leaders are no exception.

Many decision-makers also perceive cloud solutions as being more expensive. For Oracle, the license price for SaaS products is more or less double that of the on-premises alternative. The company argues that these price increases are offset by other savings, such as the elimination of hardware and in-house data center costs. For most customers, though, the difference in price presents a significant barrier.

An even bigger issue, however, is an aversion to risk. In heavily regulated industries especially, few companies are ready to fully commit to the cloud. They have seen the horror stories about high profile hacking incidents such as those experienced by Target, Equifax, Home Depot, and others. While security vulnerabilities are by no means limited to cloud-based systems, there is a perception of higher risk exposure that continues to deter many customers from moving to a public cloud platform.

Another issue is the perception of vendor lock-in. It is already challenging to migrate away from Oracle’s products, but enterprise cloud solutions shift a significantly higher portion of the IT landscape to a single vendor. Oracle is offering servers, storage, database, backup, and other infrastructure and platform tools as part of a whole-product SaaS package. That has some distinct advantages, but it makes it even harder and more expensive to move to a different vendor down the road, should it be an organization’s desire to do so.

This is not to say that there aren’t some excellent reasons for moving to the cloud. Regions Financial Corporation, for example, is a large US bank that proudly proclaims itself to be a loyal Oracle shop. The corporation sees benefits in moving to the cloud, but it prefers an incremental approach. The bank plans to stick with its on-premises software for central operations, but in the shorter term, it intends to roll out cloud-based solutions for its regional offices. Like many other customers, Regions Financial is closely watching what Oracle support is doing with its support programs for on-premises software.

End of the Road for On-Prem?

Most enterprise software vendors have indicated that support for on-premises solutions will eventually come to an end. This is a common theme from the tech companies these days, but will customers buy it? Oracle’s chief competitor, SAP, suffered a black eye last year when it announced plans to end maintenance by 2025. After significant pushback from customers, SAP extended that deadline and announced plans to continue maintenance through 2027, with the option to extend that through 2030.

In contrast, Oracle has been somewhat more generous regarding its timeframe for sunsetting on-premises support. With its 10-year rolling support policy, Oracle has committed to supporting version 12.X of the E-Business Suite through at least 2030. That’s longer than most people anticipated, and it should be a welcome policy for most customers.

Oracle has also been much better at communicating its overall roadmap than the competition. The company doesn’t always move quickly, but like every company, Oracle aims to support as few versions of their products as possible.

The Risk of Creating “Change Events”

For Oracle, there is a risk that an aggressive push toward the cloud could backfire. If customers are faced with “forced” migration, they may take that as a cue to look around at other alternatives in the market. For Oracle, this is an opportunity as well as a threat. After all, other vendors are doing the same thing, and it could create new customer acquisition opportunities as IT decision-makers pause to re-assess their vendor relationships.

Just as SAP has discovered that there are some limits to what customers will tolerate, Oracle understands that it can only go so far in dictating whether or when its customers will migrate to the cloud. Oracle will likely incentivize customers to remain loyal.

Looking to the Future

The question remains for all enterprise customers, regardless of which vendors they work with today: Will the move to the cloud eventually be mandatory? Clearly the managers at Oracle would like the answer to be yes, but so far, they are encountering resistance. There are significant benefits to being in the cloud, but most customers are still hesitant.

The key takeaway here is that while enterprise vendors are eager to make the move to 100 percent cloud-based solutions, customers simply are not yet sold on the idea. Oracle is pushing the “cloud-first” message hard through its sales organization and compensation policies, and in its messaging to customers. However, the market continues to take a wait-and-see approach as pricing, security, and vendor lock-in remain as key concerns.

]]>Save Time Reporting with Live, Accurate, Drillable Data in Excelhttps://insightsoftware.com/blog/save-time-reporting-with-live-accurate-drillable-data-in-excel/
Thu, 21 May 2020 19:59:05 +0000https://insightsoftware.com/?p=115755With Business Unusual, there’s no time for slow, inaccurate reporting. insightsoftware’s Spreadsheet Server is the solution that gives you Excel-based access to real-time data that refreshes at the click of a button, providing drill-down to journal-level detail. Do away with manual, time-consuming reporting processes. No more relying on IT, manually dumping data into spreadsheets, or … Continued

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]]>Infographic: Can Technology Improve Client Experience for Business and Professional Services?https://insightsoftware.com/blog/infographic-can-technology-improve-client-experience-for-business-and-professional-services/
Thu, 21 May 2020 07:47:45 +0000https://insightsoftware.com/?p=115386When it comes to business and professional services organizations, finance is responsible for more than the success of the business as a whole, but of client experience too. Juggling multiple projects and clients can make reporting on billable hours for invoicing more complex. Manual processes simply aren’t sustainable in the long term. There is a … Continued

]]>When it comes to business and professional services organizations, finance is responsible for more than the success of the business as a whole, but of client experience too. Juggling multiple projects and clients can make reporting on billable hours for invoicing more complex. Manual processes simply aren’t sustainable in the long term. There is a solution: Automated reporting can not only address your organization’s workload, but improve client experience. Keep reading to learn more.